Nvidia has been riding high thanks to AI, the current center of attention in the tech industry. The chipmaker's silicon is among the only such hardware that can provide the necessary processing power to enable resource-intensive commercial AI models.
Because of this, Nvidia has been sort of a bellwether for the AI industry — rising sky high as an indication of AI's extreme rate of growth.
Over the past week, however, Nvidia has taken a huge tumble on the stock market, and has lost around $500 billion in value.
This is reverberating around Wall Street because Nvidia has been making shareholders rich of late. On June 18, for example, Nvidia surpassed both Microsoft and Apple to suddenly become the world's most valuable company with a market capitalization of $3.34 trillion.
Now, just one week later, Nvidia is worth around $2.9 trillion, surrendering its most valuable company crown to Microsoft, valued at $3.3 trillion. The company now ranks third behind Apple, which is also worth over $3 trillion.
Nvidia is still doing just fine of course. And it's likely to still be raking in plenty of revenue thanks to AI-related patronage from the likes of Elon Musk, who is reportedly building an Nvidia-based "supercomputer" via his AI company xAI. However, this recent downturn on the stock market might show that investors are sending a message that they're not so bullish on the AI industry's monumental claims of how they will change the world with their technology.
As multiple outlets have reported, AI companies have made big promises, but so far have had very little to show for it when it comes to actual meaningful change in the industry's AI claimed to soon disrupt. On top of that, studies have found AI to be a massive energy and resource drain, which will certainly give at least some AI backers second thoughts about where the industry is headed.
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